Forex brokers that allow hedging

Hedging is one of the smartest yet trickiest strategy to apply in Forex trading.
Hedging frees you from dependency on the market direction, because with hedging you are trading both ways (up and down, or buy and sell).

All Forex brokers nowadays allow and support hedging, except for US based brokers (about which you can read below). The most convenient type of platform for hedging is the one that supports OCO orders (order cancels order). Unfortunately, the popular MT4 platform doesn't have OCO orders, however MT5 platform does. With MT4 however hedging can be simplified with the use of an Expert advisor.
(Example of MT4 hedging EA that uses grid trading: download MT4 hedging EA)

The list of brokers you can still hedge with has been recently reviewed due to the new NFA regulations.
Your can help by suggesting as to which broker we forgot to add/remove from the list.

Do you know another Forex broker that supports hedging?
Please suggest by adding a comment below.

Starting form May 15, 2009 new NFA (National futures Association) Rule 2-43(b) will completely ban the use of hedging for traders who trade with US brokerage firms regulated by NFA.

This New Compliance Rule 2-43(b) requires an FDM (Forex Dealer Members) to offset positions in a customer account on a first-in, first-out basis, thereby prohibiting a trading practice commonly referred to as "hedging."

What Is Hedging?

Hedging is a strategy used to minimize the risk of an reverse price movement against one or several of your open positions. For example, a trader who has a large trading position - Long 50 lots EURUSD, might decide to hedge a portion of his position by shorting 30 lots of the EURUSD. Now, in the case of an adverse or volatile price movement, a portion of the loss on the long side will be offset by the gain on the short.

However, per the new NFA rule, a trader will no longer be able to hedge a position. Instead of simultaneously holding both positions, he will now need to close out those 30 lots. Thus, rather than being long 50 lots EURUSD and short 30 lots EURUSD, he will now be simply long 20 remaining lots.

Why Hedge?

Hedging is seen as a safety net for many Forex traders. Should the market move against them, the impact on the trading account will be less severe than if they had held the position un-hedged. Another important thing to consider is that many Metatrader EAs are programmed to use hedging to offset risk. If you are using one of these trading robots it is very possible that the hedging ban will drastically increase the risk of your EA. For those who bought EAs, it would be wise to contact your EA vendor to find out if any type of hedging is used, and how this ban will effect the EA…

Another reason why hedging can be beneficial, is due to the extreme volatility that can often be found in certain trading periods. Specifically, when when the market first opens on Sunday evening or during news announcements, prices can spike drastically in either direction. It can be difficult to get out of a trade as the spreads tend to widen out. By placing a hedge before these volatile times, you may reduce the effect of volatility since you have a position in both directions. This can be beneficial because it allows you to keep your positions open without the fear of being stopped out.

How to Get Around this Hedging Ban

To continue hedging with NFA regulated brokers, a trader now needs to open 2 accounts with the same one or different brokers. Then he will simple Short a currency pair on one account and Long it on another account hence getting the same hedging effect. The only trouble this time would be: you'll need to put some more net capital into two new accounts, or at the very least to be prepared to swiftly transfer cash on a regular basis from an account that is showing a healthy profit to one where the trade is experiencing a significant drawdown.

For traders who are dependent on EAs that use hedging heavily and do not want to change trading tactics, there is also an option to consider a broker, who is not regulated with NFA, or simply a broker outside US.

BrokerGuru

trader

June 24, 2012

Ok guys I read all this, I see all this, and still because i am new, I have a serious question .. out of all these brokers, how many really are around and how many run away after a few days ? Heh, I did well on demo and I should not have done that because now I am scared to go live .. basic failure. =(

BrokerGuru

June 18, 2012

Thank you!

trader

June 15, 2012

UMC

BrokerGuru

May 22, 2012

Go Markets is one of the oldest and well known brokers in the Forex industry.
Brokers who truly have many clients will have lots of online reviews, and also a higher volume of negative reviews (with a certain percentage of reviews being submitted by novice traders). On the other hand, brokers who have a small client base might have 10-15 reviews total on various websites with most of those reviews being generally neutral or positive.
We tried to address this issue about broker reviews at "Choosing a broker: Step 4 — Read reviews about selected brokers"
(http://www.100forexbrokers.com/how-to-choose-forex-broker)

It's up to you at this stage to evaluate reviews and see if they contain essential information about broker''s trading conditions. In addition to that, you can always consider calling a broker to discuss any questions/concerns you may have about recent reviews.

At 100Forexbrokers we can't judge/evaluate or recommend any particular broker. Our mission is to collect and provide accurate data about brokers, so that traders can easily choose and compare brokers.

trader

May 22, 2012

I found many negative comments on forexarmy about go markets. What is you experience about this broker. Do you have any suggestion ?
thank You

BrokerGuru

trader

June 19, 2011

anybody have any info on citi fx pro

trader

May 31, 2011

Or you can use a bot or macro created by imacros,ubot, or zennoposter to have it enter a hedging position in your other account with a good execution speed. Having this setup on a VPS would allow for an excellent execution speed.

yen to pounds

May 28, 2011

hedging is a not a trading strategy. it's only showing your weakness in taking a trading decision and sticking to it no matter what happens. In that case, you need to build your strategy and your skillls...that's the only way.http://www.yen-to-pounds.net

trader

April 10, 2011

guys dont vote for obama he ruined the forex industry we cannot hedge or go offshore anymore. Pls make a change in the coming elections.

trader

March 31, 2011

FBS is in the list of heading brokers but there terminal do not execute heading positions.FBS is also not a good broker.They are real cheaters,and i have proves.They claim of being stp but there slipage, reqoutes, offqoutes are just like market makers.Thats why i am sure they are not STP.They claim on there website that hedging is allowed but heading is not possible in real accounts,i have to bear loss because of there cheating.

BrokerGuru

March 5, 2011

Sorry, I'm not sure I understand you. Can you add some information?

trader

February 26, 2011

I HAVE A QUARRY MINE FOR HEDGING ANY BROKER OR TRADER AVAILABLE ?OTERO.CHRISTIAN@GMAIL.COM

ForInvest Group

January 13, 2011

ForInvest Grouphttp://www.forinvest.net/
Hedging is allowed with no restrictions

trader

December 26, 2010

vertifx.com broker is good for hedging.

trader

December 22, 2010

anybody had any news or comments or review on Huprofx? a.s.a.p. ever heard of it? been told based at UK. can somebody confirm with me the legitimacy of the company? with scams going all rounder, need to have other reviews on huprofx.

trader

December 6, 2010

So far, I haven't found an offshore forex brokers will allow US citizens to open an account. This is ridiculous.

trader

December 5, 2010

Even the Forex brokers that supposedly allow hedging won't allow a US citizen to even open an account with them. What are we supposed to do? Any ideas?

trader

October 28, 2010

the UK office - yes.

trader

October 28, 2010

does igmarkets UK allowed hedging

trader

October 27, 2010

IamFX forwards you to another site after letting you know about the new USA rules. The site (ForexHoster) seems to be a software subscription service.